Kenya Revenue Authority (KRA) Achieves Impressive Growth in Revenue Collection Amidst Challenges

Revenue

The Kenya Revenue Authority (KRA) has shown impressive growth in revenue collection, recording a 6.7% increase in the financial year 2022/2023. Despite facing challenges such as a global economic slowdown and domestic issues like prolonged drought and international conflicts disrupting the supply chain, KRA managed to collect KShs. 2.166 Trillion for the period of July 2022 to June 2023. This is an increase of KShs. 135 Billion from the previous financial year.

KRA’s revenue collection has been on an upward trajectory for the past five years, growing by 37% from KShs. 1.58 Trillion in FY2018/2019 to KShs. 2.166 Trillion in FY2022/23. This growth can be attributed to the implementation of key strategies such as customer support programs, tax base expansion, taxation of the digital economy, tax at source, debt collection initiatives, dispute resolution framework, and leveraging technology.

One of the key drivers of revenue growth was the implementation of customer support programs aimed at creating a customer-centric tax environment to enhance voluntary compliance and improve revenue collection. These programs include tax education and awareness, stakeholder engagements and roundtables, and customer visits to appreciate compliant taxpayers, among others.

Another key driver was the expansion of the tax base through the onboarding of taxpayers previously not paying taxes. This program enabled KRA to collect KShs 14.649 Billion in revenue and recruit 940,483 additional active taxpayers in the period under review.

KRA also leveraged technology to simplify tax processes and facilitate trade. For example, the implementation of the Electronic Tax Invoice Management System (eTIMS) minimized VAT fraud and increased tax revenue, while the integration of betting and gaming companies into the KRA tax system gave KRA real-time access to all companies in the gaming and betting sector.

In addition to these strategies, KRA also achieved key milestones in its efforts to improve revenue collection. For instance, Excise on Betting registered a stellar performance rate of 116.2% after collecting KShs 6.640 Billion against a target of KShs 5.715 Billion. This performance is attributed to the integration of betting companies into the KRA tax system which streamlined tax remittance from the sector and scaled up revenue collection.

Domestic VAT collection also showed significant growth, standing at KShs. 272.452 Billion reflecting a growth of 11.3 per cent compared to the previous year. The growth is attributed to the implementation of the Tax Invoice Management System (TIMS), which has enhanced compliance among VAT-registered taxpayers.

Going forward, these achievements have the potential to continue driving growth in revenue collection for KRA. The authority is confident that it will continue to achieve its targets and enable the government to finance its Bottom-Up Economic Transformation Agenda (BETA) and sustain the country’s economy through the implementation of both tax administrative measures and tax policy reforms. KRA has shown impressive growth in revenue collection despite facing challenging economic conditions. The authority has achieved key milestones through the implementation of effective strategies and is committed to upholding integrity and professionalism in serving taxpayers and making taxpaying a pleasant experience.

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